Three months of breathing space for Eircom in waiver deal
EIRCOM'S lenders have voted to give the telecom company three months' breathing space by easing the conditions attached to the firm's loans.
Sources involved in the talks said a ballot of lenders on whether to grant the covenant waiver was passed by a comfortable majority of the funds that hold Eircom's €2.75bn of senior loans, when ballots were counted last night.
Eircom's total debt runs to €3.7bn but €1bn of that is owed to relatively junior lenders with less security and already-loose conditions govern the more junior debts.
A spokesman for Eircom refused to confirm that the vote had been carried -- but an official announcement is expected after the 200 or so lenders have been formally notified.
The three-month waiver period has been agreed between the company and its lenders to facilitate talks on the more substantive issue of how to restructure.
Securing the temporary changes to the debt terms comes at a cost of around €14m for Eircom -- which is paying lenders that backed the waiver deal a fee of 5pc of the value of their loan holdings.
The company also agreed to create a formal independent directors' subgroup, made up of directors not associated with shareholders STT and the employee ESOT.
The waiver deal was brokered by the firm and a committee of senior lenders made up of Alcentra, Avoca Capital, Deutsche Bank, GSO Capital Partners, Harbourmaster Capital Management and Sumitomo Mitsui Financial Group.
Their advisers Houlihan Lokey and Gleacher Shacklock will hold more detailed talks on how best to free the company from the more junior debts.